February 2nd 2022 The General Court of the European Union has ruled on two actions for annulment lodged by PGNiG SA against decisions of the European Commission. The first action concerned a 2018 decision accepting Gazprom’s commitments proposed as a result of the Commission’s antitrust investigation. The other action concerned a 2019 decision in which the Commission had rejected PGNiG’s complaint of 2017 about Gazprom’s monopolistic practices in the Polish market.

In the latter case, the EU General Court agreed with the Company, annulling the Commission’s decision. The judgement stated that the Commission had made a manifest error of assessment referring to the Gaz-System certification decision issued in 2015 by the Polish Energy Regulator to justify the rejection of PGNiG’s complaint where it concerned the Yamal Pipeline. The Court also concluded that the Commission had infringed the Company’s procedural rights.

“Our victory before the EU General Court means that the European Commission must reconsider PGNiG’s complaint of 2017. We hope that the Commission will take the opportunity provided by today’s judgment to take decisive action against Gazprom’s violations of competition law. It should be stressed that most of Gazprom’s practices complained against by PGNiG have continued to this day and should be subject to an in-depth investigation by the Commission because of their potential effect on the European gas market,” said Paweł Majewski, President of the PGNiG SA Management Board.

At the same time, the General Court ruled to dismiss the Company’s action against the European Commission’s decision of 2018 accepting Gazprom’s Commitments. PGNiG reiterates its negative opinion on the decision accepting Gazprom’s Commitments and the arrangements adopted therein, which it has expressed repeatedly, both in the course of the Commission’s market test undertaken in 2017 and later in its pleadings.

It should be emphasised that the General Court’s judgment has not confirmed in any way the legality of Gazprom’s actions – both current and past. Its judgments merely state that the Commission, in issuing its decisions, did commit some errors and infringements, but not providing sufficient grounds for annulment of the commitments decision.

“The ruling to uphold the Commission’s decision of 2018 may reinforce Gazprom’s belief that the practices involving abuse of its dominant position on the European gas market will be treated leniently by EU institutions. The lack of a firm response to such practices in the past may even have emboldened Gazprom to cut supplies and not fill up its storage facilities in the EU, which is largely the reason for the historically high level of gas prices currently prevailing across the European wholesale markets,” stressed Paweł Majewski.

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Between 2012 and 2018, the Commission investigated Gazprom’s monopolistic practices in Central and Eastern Europe, including Poland. The allegations against Gazprom included obstructing gas trade between EU countries in the region and charging them abnormally high gas prices. In addition, in the case of Poland and Bulgaria allegations were made that Gazprom had conditioned gas supplies on some infrastructure-related aspects. In view of reports that appeared in late 2016 and early 2017 hinting at possible amicable conclusion of the investigation, in March 2017 PGNiG SA requested to be allowed to participate in the procedure as a complainant (as a party aggrieved by Gazprom’s practices). In the complaint, the Company presented its position regarding the practices alleged against Gazprom and pointed to information relevant to the investigation. At the same time, in accordance with Regulation 773/2004, to which the Commission is subject, the Company requested access to documents relevant to the case.

The Commission accepted Gazprom’s commitments by way of a decision issued in 2018 and rejected the Company’s application in 2019, citing as reasons the acceptance of the commitment decision and the “impossibility to rule out” that Gazprom’s practices disregarded in the commitment decision, in particular those concerning the Yamal Pipeline, had resulted from existing international law (the 1993 Intergovernmental Agreement between Poland and the Russian Federation) and Russian law. It also refused to grant the Company access to the documents in accordance with the aforementioned regulation.